Vesuvio Fonderia S.P.a

May 9th, 2015

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1. Please assess the economic benefits of acquiring the Bond-O-Matic molding machine, first by projecting the cash flows of both alternatives of the next 24 years, and then by computing the EAC assuming the Bond-O-Matic has a life of 8 years, and the SemiAutomatic has a life of 6 years. What is the initial outlay? What are the benefits over time? What is an appropriate discount rate? Does the net present value (NPV) warrant the investment in the machine?

Vesuvio Fonderia S.P.a1. Please assess the economic benefits of acquiring the Bond-O-Matic molding machine, first by projecting the cash flows of both alternatives of the next 24 years, and then by computing the EAC assuming the Bond-O-Matic has a life of 8 years, and the SemiAutomatic has a li